With AT&T, Comcast and Charter Communications kicking off telecom second-quarter earnings season by announcing combined traditional TV service customer losses of around 1.2 million subscribers, equity research company MoffettNathanson is predicting that once all Q2 reports are rendered, cord-cutting for linear pay TV services will have hit an all-time high of 5.5%.
“With Comcast’s, AT&T’s and Charter’s 2Q earnings in the books, the read on traditional cord-cutting is freaking ugly,” wrote the firm’s principal analyst, Michael Nathanson.
Note: The original version of this story attributed the report and comments to the wrong MoffettNathanson senior analyst.
Even for skinny bundles delivered over-the-top, the news isn’t great, with Nathanson estimating a shrinkage rate of around 2.7% in the second quarter once all the data is in.
It should be noted that Nathanson’s pungent appraisal of the pay TV ecosystem preceded Dish Network’s surprising report Monday that it’s linear satellite service only lost 79,000 customers in the second quarter. Analysts had expected losses of around 350,000.
Also, Dish’s virtual MVPD, Sling TV, added 48,000 customers in the quarter, with analysts expecting narrower growth of around 15,000 users.
Regardless, the rate of attrition is quickening. And despite efforts by media companies like Disney, which are building a la carte options like Disney+ to transition away from the eroding pay TV bundle, Nathanson believes the current numbers are a big problem.
“While we applaud our company’s efforts to turn their stories around and build their respective lifeboats for the future, the data points raise serious concerns over the rate of decay of the traditional ecosystem,” Nathanson said. “Man the lifeboats!”